India has a PhD crisis that could act as an economic drag

After completing their Master’s degrees, students face a stark choice: pursue lucrative corporate careers or commit to the rigours of a Doctor of Philosophy (PhD) programme offering limited financial stability. 

The disparity is glaring. Junior Research Fellowship (JRF) students get a monthly stipend of ₹37,000, but those outside this category often receive no financial support. Even JRF benefits are limited to five years, placing an immense financial burden on students in the later stages of their PhD.

A PhD in India typically takes 5–7 years to acquire. A student beginning at age 23 faces years of meagre stipends, in stark contrast to the attractive salaries of the corporate sector. 

This raises a critical question: Why would India’s brightest minds choose academia when the financial incentive of taking a private-sector job is so strong?

A deep look at India’s education funding exposes the root of this problem. The country allocates just 3.85% of its GDP to education—much lower than the global average of 4.22%. Developing nations like China, Brazil and Argentina invest more. 

Even Cuba, despite its economic challenges, dedicates 12% of its GDP to education. South Africa, with a median age of 27, spends 7% of its GDP on education, recognizing the need to educate its young population. But India, with a similar demographic profile (median age 28) lags far behind in this critical investment.

India also falls short on research funding. The country spends a mere 0.7% of its GDP on research and development (R&D), well below the global average of 1.8%. 

This dismal figure places India near the bottom in R&D expenditure among major economies. Without increased investment, India risks losing its best talent to better-funded countries and suffering low levels of innovation.

Compounding the issue is the government’s reliance on a cess to fund education. Since 2015, nearly 70% of education spending has been supported by a 4% education and health cess, initially introduced at 2% in 2004. This dependence on a temporary revenue source highlights the government’s failure to address deeper structural issues in education funding.

While India has seen its number of educational institutions grow, with nearly 50,000 colleges and 1,100 universities, this expansion has come at the expense of quality. 

The ASER 2023 Beyond Basics report paints a grim picture: although 86.8% of rural youth aged 14-18 are enrolled in educational institutions, a quarter of them cannot read basic class-two-level text in their native language. This points to a troubling disparity in the effectiveness of our education system, particularly in rural areas.

The link between education and prosperity is evident. India’s per capita income in 2023 was just $2,600. In states with higher education levels, like Kerala, Telangana and Tamil Nadu, per capita income averages around $4,000, while in Bihar and Uttar Pradesh, where education lags, it’s below $1,000.

The situation is equally dire in skill development and employability. India ranks 39th out of 67 countries in the IMD World Competitiveness Rankings for education, and only 40% of graduates are considered employable. These statistics reflect India’s struggle to build a workforce capable of driving future economic growth and innovation.

To reverse this trend, India must drastically increase its education spending. Achieving the country’s gross enrolment ratio target of 50% by 2035 and the broader vision of a developed India by 2047 will require a significant funding boost. 

The education budget must increase by at least 1.5 percentage points, with a focus on emerging fields like climate technology and artificial intelligence. 

The government should reduce GST on educational services to zero and encourage foreign direct investment (FDI) in education, following successful models like Singapore’s.

Also read: R&D spends of Indian IT majors on a decline

Addressing the funding crisis in higher education is crucial. Fellowships for PhD students must be increased, interest rates on education loans slashed and the tax burden on educational institutions reduced. Additionally, 75% of corporate social responsibility (CSR) funds should be allocated to education and healthcare.

Failure to act has led to a growing exodus of Indian PhD students seeking opportunities abroad. According to Rostrum Education, the number of Indian PhD candidates going overseas increased by 70% in 2023. 

Better employment prospects, access to advanced research infrastructure and a greater number of scholarships are driving this exodus. 

The All India Research Scholars Association has called for a 60% hike in PhD stipends, with automatic inflation adjustments every four years. While this may be ambitious, a 30-40% increase, coupled with annual inflation adjustments, could provide much-needed financial relief to PhD scholars.

The crisis in India’s research ecosystem is undeniable. Without policy support and reforms in funding and infrastructure, we will continue to lose our brightest minds to better-supported environments abroad. India’s education and research sectors are at a crossroads. The question is: Will Indian leaders act before it’s too late?

These are the author’s personal views.